Foster children; three homes...can someone claim them?

[Ross]

A client took care of his three nieces and nephews for five months in 2008. His sister only had them for less than four months and his mother also had them for less than four months. The sister already claimed all three and may have got an advanced EIC from H & R Block. My client doesn't meet the 6 month test. Either does his sister. Can anyone legally claim the foster children?

[David1980]

Are you using the term "foster child" as in meeting the IRS definition of a foster child. Or are you using the term in a generic way in that these children were not with the parents?

[Ross]

Yes, per IRS definition of Foster Child

The children were appointed by the court. Thanks.

[oceanlovin'ea]

court appointment

Whoever is the court appointed guardian is the one that can claim the children on a tax return IF they have been in the home for at least 6 months of the year.

I have clients who are foster parents and have eventually adopted 9 of the foster children that were placed in their home. But on occasion the children were placed in their home in September and so were not there for the 6 month period. They could not claim the exemption for that year.

It might be that no one can claim them for this year.

Linda

[Ross]

I'll pass this info on to my client. I'm sure he will say he has more of a right to claim the children than his sister. They are his sister's kids and they were taken away from her. He may want to blow the whistle on her taking the EIC and claiming them. They only lived w/ her for a few months. As you can tell, him and his sister are not on good terms. Any advice/contact info on how to report her EIC abuse?

[David1980]

I'm sure that'll help their family relationship.

So although it was not specifically said, may we assume that sister is the real parent of the children. Taxpayer is the one who is fostering them. Mother is neither a parent nor a foster parent?

(I'd cringe to think of children being placed by a court to 3 separate people in the year.)

The taxpayer may actually qualify to claim the foster children as qualifying relatives. Assuming of course that they did not live with the mother for at least 6 months and therefore are not the qualifying child of anyone. Foster child is one of the relationships where the dependent does not have to live with you. The only potential issue there is the support test. Did the taxpayer provide over half the dependents support for the year? (If no, you could do a multiple support agreement but if taxpayer & sister are not on speaking terms good luck with that.)

Of course same applies for sister. Child is a relationship for "does not have to live with you" for qualifying relative. So if she provided over half their support she could get it.

[JohnH]

This appears to be a nightmare return. Client is on shaky ground with claiming the exemptions in the first place. Sister is claiming them to get EIC. It's almost certain that a support worksheet is going to be required at some point - very likely after everyone's memory has faded a bit, and who knows what sort of family dynamics will have transpired between now and then. The preparer will probably be fielding calls from the client, the mom, and the sister one it all hits the fan. Then there's the "due diligence" issue with maybe a $500 penalty in the wings.

For me, this is a referral to HRB - they have the deep pockets. I feel sorry for the kids, who are the victims of all this nonsense.

[Kram BergGold]

My View

I read page 3-13 in TTB. The children are not the qualifying children of anyone. Whoever provided over 50% of support is the one entitled to claim then as dependents under the qualifying relative rule. If no one provided over 50% then you have a multiple support situation and Form 2120 is the way to go. So your client can either follow these rules and challenge his sister by claiming the kids or pass on the kids.

[Burke]

If your TP claims kids, the dependency exemptions will be rejected when return is received as previously being claimed by another TP. Then the TP can respond to the IRS with proper documentation and let it proceed on their end. Given the budget cuts and hiring freeze, this may take quite a while. Alternatively, he can report someone for a fraudulent EIC claim using Form 3949-A or writing to the IRS at Fresno CA. Download form from IRS website.

[Roland Slugg]

This post and the first five replies to it are eight years old.

[taxea]

I would ask questions about the timing. If the kids were taken from the mother by the State and temporially placed in foster care it is possible that this could be considered "temporary housing". If the mother got them back after the time periods stated, that point could be argued and she may be able to take them.